The University of Connecticut’s Board of Trustees and UConn Health Board of Directors voted Friday to approve submitting a $13 million bid to acquire Waterbury Hospital.
The vote was confirmed in an email from UConn Health, which operates the state-owned University of Connecticut Health Center.
“Following today’s approval by the UConn Health Board of Directors, the UConn Health Center Finance Corporation Board, and the UConn Board of Trustees, UConn Health plans, in the coming week, to submit a bid to invest in Waterbury Hospital,” the email states.
According to the agenda for the UConn Board of Trustees’ meeting, the proposal submitted by UConn Health recommended authorizing the chief financial officer or executive director of the UCHC Finance Corp. to enter into an asset purchase agreement of $4 million and a purchase and sale agreement of $9 million, as well as to “execute other documents” as may be necessary, “for the purpose of submitting a binding bid to purchase certain assets and associated real property of Prospect Waterbury.”
A spokesperson for UConn Health confirmed that its board approved submitting a bid “not to exceed $13 million.”
According to city property records, the hospital building sits on 35.56 acres at 64 Robbins St. The buildings and land at that address, which are owned by MPT of Waterbury PMH LLC, are appraised at a combined $245.31 million. That makes UConn Health’s $13 million bid about 5.3% of the appraised value.
UConn Health’s bid to acquire Waterbury Hospital comes about a week after Yale New Haven Health System reached a settlement with Prospect Medical Holdings to cancel its bid to acquire Prospect’s three Connecticut Hospitals. YNHH agreed in April 2022 to pay $435 million to acquire Waterbury, Manchester Memorial and Rockville General hospitals. Late last month, YNHH agreed to pay Prospect $45 million to settle litigation surrounding its efforts to withdraw its offer.
Prospect filed for Chapter 11 bankruptcy protection in federal court in Dallas in January, and has scheduled an auction to sell its three hospitals later this month.
Last month, Prospect named “ECHN Holdings Inc.” as a stalking-horse bidder, with a bid of $86 million for Manchester Memorial and Rockville General hospitals. Hartford HealthCare has been confirmed as the organization behind that bid.
In background information included with the proposal approved by the UConn boards today, UConn Health said that it and the state, “through the Finance Corporation, will leverage a one-time opportunity to develop a new private, non-profit Connecticut health system, at scale, that will provide a high quality, low-cost alternative for patients, powered by UConn Health’s brand and track record of excellence.”
In the email confirming today’s approval to make the bid, UConn Health added that the “strategy represents a partnership with the state to preserve access to healthcare in the Waterbury region.”
In addition, the acquisition would extend “UConn Health’s award-winning care to more communities in the state and creates the scale necessary to meet UConn Health’s capacity and growth needs.”
A report released last year, commissioned by the governor and completed by investment banking firm Cain Brothers, found that the health center had too small of a footprint to compete with other academic medical centers in the current market. The health center generated cash flow losses averaging $140 million per year between 2020 and 2023, the consultants wrote.
Dr. Andy Agwunobi, CEO and executive vice president of health affairs for UConn Health, said the potential acquisition of Waterbury Hospital “represents an important partnership with the state to help preserve access to healthcare in the Waterbury region, while also extending UConn Health’s award-winning care to more communities across Connecticut.”